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MFL
MFL
MFL - Metrofile - Unaudited Group Results for the six months ended 31 December
2011
METROFILE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1983/012697/06)
Share code: MFL
ISIN: ZAE000061727
("Metrofile" or "the company" or "the group")
Unaudited group results
for the six months ended 31 December 2011
- Revenue up 14,8%
- EBITDA up 19,6%
- HEPS and EPS up 21,7%
- Interim dividend up 50%
Condensed income statement
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 Note 2011 2010 2011
Revenue 252 593 220 045 460 552
Earnings before interest, 81 621 68 250 146 200
taxation, depreciation and
amortisation (EBITDA)
Depreciation (10 879) (9 070) (19 076)
Operating profit before 70 742 59 180 127 124
finance costs
Net finance costs (11 305) (12 630) (23 642)
Finance income 706 541 1 588
Finance costs (12 011) (13 171) (25 230)
Profit before taxation 59 437 46 550 103 482
Taxation 1 (17 032) (12 191) (29 541)
Profit for the period 42 405 34 359 73 941
Attributable to:
Owners of the parent 41 564 34 045 73 874
Non-controlling interests 841 314 67
Attributable profit 42 405 34 359 73 941
Further information
Number of ordinary shares 412 168 408 085 408 085
in issue (thousands)
Weighted average number of 409 741 408 085 408 085
ordinary shares in issue
(thousands)
Diluted earnings per
ordinary share
Diluted earnings per 10,1 8,3 18,1
ordinary share (cents)
Headline earnings per
ordinary share
Headline earnings per 10,1 8,3 18,1
ordinary share (cents)
Dividend per ordinary
share
Interim dividend per 3,0 2,0 -
ordinary share -
proposed/paid (cents)
Final dividend per - - 2,5
ordinary share - paid
(cents)
Condensed statement of comprehensive income
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Profit for the period 42 405 34 359 73 941
Other comprehensive income for (864) (2 145) 103
the period net of tax
Hedge accounting for fair value (990) (2 125) (542)
on interest rate swaps
Currency movement on translation 126 (20) 645
of foreign subsidiary
Total comprehensive income for 41 541 32 214 74 044
the period
Attributable to:
Owners of the parent 40 638 31 900 73 731
Non-controlling interests 903 314 313
Condensed statement of financial position
Unaudited Unaudited Audited
as at as at as at
31 December 31 December 30 June
R`000 Note 2011 2010 2011
ASSETS
Non-current assets 500 998 467 137 485 572
Property, plant and 329 139 294 129 313 094
equipment
Goodwill 169 943 169 943 169 943
Deferred tax asset 1 916 3 065 2 535
Current assets 122 503 101 840 120 834
Inventories 14 802 11 857 12 343
Trade receivables 74 408 62 141 66 144
Other receivables 8 484 4 799 4 637
Bank balances 24 809 23 043 37 710
Total assets 623 501 568 977 606 406
EQUITY AND LIABILITIES
Equity and reserves 343 169 275 594 310 443
Equity attributable to 340 623 273 950 308 800
owners of the parent
Non-controlling interests 2 546 1 644 1 643
Non-current liabilities 197 689 219 600 208 154
Interest-bearing 2 186 150 210 480 198 734
liabilities
Deferred taxation 11 539 9 120 9 420
liability
Current liabilities 82 643 73 783 87 809
Trade and other payables 46 702 39 322 49 710
Deferred revenue 9 600 8 298 10 000
Bank overdraft - 81 129
Provisions 56 196 1 779
Taxation 101 2 377 515
Interest-bearing 2 26 184 23 509 25 676
liabilities
Total equity and 623 501 568 977 606 406
liabilities
Net asset value per 82,6 67,1 75,7
ordinary share (cents)
Notes:
1. The taxation charge includes Secondary Taxation on Companies amounting to
R1,0 million (30 June 2011: R0,8 million and 31 December 2010: R Nil).
2. Long-term interest-bearing liabilities include the Metrofile (Pty) Limited
amortising and bullet loans which have a remaining 52-month tenure as well as
loan agreements entered into by Cleardata (Pty) Limited in order to finance
mobile shredding units. Short-term interest-bearing liabilities include the
portions of the Metrofile (Pty) Limited amortising loan and Cleardata (Pty)
Limited loan agreements payable within one year. (The Metrofile (Pty) Limited
borrowings are JIBAR linked and were 69% hedged by way of the interest rate
swaps at the year-end (30 June 2011: 80%), whilst the Cleardata (Pty) Limited
borrowings are prime linked and unhedged.)
3. The majority of the group`s assets have been pledged as security against
certain loans to the group.
Reconciliation of headline earnings
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Profit attributable to owners of 41 564 34 045 73 874
the parent
(Profit)/Loss on sale of plant (47) 9 (279)
and equipment
Tax effect of above item 13 (3) 78
Headline earnings 41 530 34 051 73 673
Headline earning per ordinary 10,1 8,3 18,1
share (cents)
Condensed segmental information
Sales revenue
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Metrofile Records Management 199 702 176 482 366 874
CSX Customer Services 35 166 31 915 70 270
Property Companies - - -
Other 21 980 15 491 31 237
Inter-group (4 255) (3 842) (7 829)
Total 252 593 220 045 460 552
EBITDA
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Metrofile Records Management 54 109 45 059 98 847
CSX Customer Services 4 306 2 904 7 040
Property Companies 19 573 17 434 34 867
Other 3 633 2 854 5 446
Inter-group - - -
Total 81 621 68 251 146 200
Depreciation
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Metrofile Records Management 8 606 7 372 15 440
CSX Customer Services 263 238 475
Property Companies - - -
Other 2 010 1 460 3 161
Total 10 879 9 070 19 076
Operating profit before interest
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Metrofile Records Management 45 503 37 687 83 407
CSX Customer Services 4 043 2 666 6 565
Property Companies 19 573 17 434 34 867
Other 1 623 1 394 2 285
Total 70 742 59 181 127 124
"Metrofile Records Management" represents the Metrofile document storage and
management and scanning business units which are managed and operated
geographically.
"Other" includes Metrofile Holdings Limited, Africa operations, the paper
management business and Cleardata (Pty) Limited.
Condensed statement of cash flows
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
R`000 2011 2010 2011
Cash generated from 80 374 70 134 149 365
operations before net
working capital changes
(Increase)/Decrease in (17 978) (7 782) 810
net working capital
Cash generated from 62 396 62 352 150 175
operations
Net finance costs paid (11 305) (12 630) (23 642)
Dividends declared (10 203) - (8 162)
Normal taxation paid (14 708) (13 807) (29 229)
Net cash inflow from 26 180 35 915 89 142
operating activities
Net cash outflow from
investing activities:
Investment in property, (23 745) (12 533) (38 164)
plant and equipment:
expansion
Investment in property, (3 817) (4 395) (8 261)
plant and equipment:
replacement
Proceeds on disposal of 685 244 1 008
property, plant and
equipment
Net cash outflow from
financing activities:
Loans repaid (12 075) (10 060) (32 935)
Loans raised - - 13 000
Net (decrease)/increase (12 772) 9 171 23 790
in cash and cash
equivalents
Cash and cash 37 581 13 791 13 791
equivalents at the
beginning of the period
Cash and cash 24 809 22 962 37 581
equivalents at the end
of the period
Represented by:
Bank balances 24 809 23 043 37 710
Bank overdrafts - (81) (129)
Condensed statement of changes in equity
Accumu-
Share Share lated Other
R`000 capital premium losses reserves
Balance at 30 June 2 508 518 817 (280 856) 460
2010
IFRS 2: Equity 1 121
Reserve relating to
share schemes
Total comprehensive 34 045 (2 145)
income for the
period ended 31
December 2010
Balance at 31 2 508 518 817 (246 811) (564)
December 2010
IFRS 2: Equity 1 181
Reserve relating to
share schemes
Dividends declared (8 162)
and paid
Total comprehensive 39 829 2 002
income for the
period ended 30 June
2011
Balance at 30 June 2 508 518 817 (215 144) 2 619
2011
Shares issued in 25 9 774
terms of share
schemes
IFRS 2: Equity 1 388
Reserve relating to
share schemes
Share scheme (7 593) (2 206)
settlement
Dividends declared (10 203)
and paid
Total comprehensive 41 564 (926)
income for the
period ended 31
December 2011
Balance at 31 2 533 528 591 (191 376) 875
December 2011
Total
equity
before
minority Non-
apportion- controlling
R`000 ment interest Total
Balance at 30 June 240 929 1 330 242 259
2010
IFRS 2: Equity 1 121 1 121
Reserve relating to
share schemes
Total comprehensive 31 900 314 32 214
income for the
period ended 31
December 2010
Balance at 31 273 950 1 644 275 594
December 2010
IFRS 2: Equity 1 181 1 181
Reserve relating to
share schemes
Dividends declared (8 162) (8 162)
and paid
Total comprehensive 41 831 (1) 41 830
income for the
period ended 30 June
2011
Balance at 30 June 308 800 1 643 310 443
2011
Shares issued in 9 799 9 799
terms of share
schemes
IFRS 2: Equity 1 388 1 388
Reserve relating to
share schemes
Share scheme (9 799) (9 799)
settlement
Dividends declared (10 203) (10 203)
and paid
Total comprehensive 40 638 903 41 541
income for the
period ended 31
December 2011
Balance at 31 340 623 2 546 343 169
December 2011
Commentary on results
Profile
Metrofile is the market leader in information and records storage management in
Africa and is represented in the six major provinces of South Africa,
Mozambique and, through the CSX brand, has contracts in numerous other African
countries. Metrofile operates from 26 facilities covering more than 73 000
square metres of warehousing space and manages more than 21 billion records on
behalf of its customers.
Services include: Active Records Management, Image Processing, Hosting, Data
backup (both vault and on-line), Archive Storage & Management, File plan
development, Confidential Records Destruction, Paper Recycling as well as the
sale and maintenance of a wide range of business equipment, including scanners,
library security systems, mailing and packaging machines.
Metrofile has been listed on the JSE Limited ("JSE") since 1995 and its
ordinary shares are quoted in the "Support Services" sector of the JSE lists.
Its largest shareholder is its empowerment partner, Mineworkers Investment
Company (Pty) Limited ("MIC"), which owns 32,9% of Metrofile`s equity.
Strategy
Metrofile continues to expand its services in the information management sector
with a focus on cross-selling the group`s diverse range of solutions and
services to both new and existing customers. The group is well-positioned to
partner with its customers with regard to good record keeping, legal compliance
and risk mitigation.
Metrofile`s expansion into Africa has been frustrating with numerous factors
delaying the commencement of operations in Nigeria. Management remain committed
to this expansion whilst managing the risk so as not to negate the continued
growth in South Africa. Mozambique continues to contribute positively but
remains a relatively small market place. Several other African countries remain
on the Metrofile radar.
Financial review
Revenue increased by 14,8% to R252,6 million and EBITDA by 19,6% to R81,6
million. Cash generation from operations of R62,4 million is equal to the
comparative period due an increase in working capital which was mainly due to
lower than expected accounts receivable collections. Net finance costs reduced
by 10,5% in line with the further reduction in debt and the taxation rate was
higher than previous periods due to the payment of Secondary Tax on Companies
relating to the dividends paid.
Diluted earnings per share ("EPS") and headline earnings per share ("HEPS")
increased by 21,7% to 10,0 cents (2010: 8,3 cents) whilst the interim dividend
per share, declared after period-end, was increased by 50,0% to 3,0 cents
(2010: 2,0 cents).
The increase in capex is in line with expectations and is mainly for expansion
and includes racking of R12,5 million required to service the new CIPC contract
which began in January 2011. Despite the high capex programme, overall gearing
has continued to improve leading to a debt/equity ratio of 62,3% (2010: 85,4%).
Metrofile continues to account for its property portfolio on a cost basis and
will have a formal valuation done in June 2012 so as to establish the latest
excess value over the carrying value.
Basis of preparation and accounting policies
The group results have been prepared, under the supervision of Mr RM Buttle,
CA(SA), in accordance with the recognition and measurement principles of
International Financial Reporting Standards (IFRS), including the information
required by IAS 34: Interim Financial Reporting, the AC 500 standards issued by
the Accounting Practices Board or its successor, and the Listings Requirements
of the JSE. The same accounting policies and methods of computation were
applied as in the prior year annual financial statements.
Certain accounting pronouncements became effective during the current financial
period, however these do not have an impact on either transactions or
disclosures.
Related parties
In terms of the consulting agreement with the MIC, fees of R0,50 million (2010:
R0,42 million) were paid during the period under review.
Directorate and corporate governance
The structure and membership of the Board remains unchanged whilst the addition
of the Social, Ethics and Transformation Committee came into effect in November
2011; this committee will meet twice per year. The Board comprises two
executive and seven non-executive directors, of whom four are independent
directors.
Dividends
The improvements in the group`s financial structure and continued strong cash
flows have enabled the Board to improve the dividend cover from 4,15 times in
the comparative period to 3,33 times for the current period whilst the target
remains a cover of three times.
Notice is hereby given that an interim cash dividend of 3,0 cents per share in
respect of the period ended 31 December 2011 has been declared payable to the
holders of ordinary shares recorded in the books of the company on Friday, 23
March 2012. The last day to trade cum-dividend will therefore be Thursday, 15
March 2012, and Metrofile shares will trade ex-dividend from Friday, 16 March
2012. Payment of the dividend will be made on Monday, 26 March 2012. Share
certificates may not be dematerialised or rematerialised between Friday, 16
March 2012 and Friday, 23 March 2012, both days inclusive.
Commitments and expansion
The group continues to monitor and optimise its balance of owned and leased
premises to ensure the continued availability of space to meet expansionary
demand relative to the cost of unutilised facilities. Owned premises comprised
50 000 square metres and leased premises 34 600 square metres at period-end.
Lease commitments over the next five years amount to R41,4 million (2010: R35,1
million). Capex for the 2012 financial year is planned at R58,4 million of
which R49,9 million is for new capacity; this amount includes additional
premises. (2011 spend: R46,4 million of which R38,2 million was for new
capacity).
Post reporting date events
There have been no material post reporting date events.
Outlook
The continued need for reliable and cost effective records management, the
group`s unique capacity to handle volume requirements in storage and access,
the widening range of related services offered (such as on-site confidential
destruction) and the market requirements for solution orientated integrated
offerings are all factors in our optimism for continued future growth in
earnings, dividends and cash flows.
This interim statement has not been reviewed or audited by Metrofile`s
auditors.
CHRISTOPHER SEABROOKE GRAHAM WACKRILL
Non-Executive Chairman Chief Executive Officer
16 February 2012
Cleveland
Gauteng
Registered office:
3 Gowie Road, The Gables, Cleveland
Johannesburg, 2094
www.metrofile.com
Sponsor:
The Standard Bank of South Africa Limited
Transfer secretaries:
Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
Directors:
CS Seabrooke (Chairman)
AP Nkuna* (Deputy Chairman)
GD Wackrill (CEO)
RM Buttle (CFO)
MS Bomela*
CN Mapaure*
IN Matthews
N Medupe
SR Midlane
CP Coutts-Trotter+
Independent
*Non-executive
+Alternate to CS Seabrooke
Company Secretary:
P Atkins
Date: 16/02/2012 16:57:02 Produced by the JSE SENS Department.
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